Massively^™

Get ready for some dubious corporate drama. We were contacted by a tipster claiming to be a Cheyenne Mountain Entertainment employee. He or she alleged, among other things, that CME/Firesky is in critical financial condition -- that it has accrued a large debt, that massive layoffs are planned, and that the future of Stargate Worlds might be in jeopardy. Knowing full well that potentially-scorned anonymous employees are rarely a wholly reliable source, we contacted the company and provided them an opportunity to comment.

We were told that the tip was full of inaccuracies and overstatements. The official comment was this: "Cheyenne Mountain Entertainment is a start up, and like many start ups, we face the typical cash flow issues that all pre-revenue companies face. CME continues to fund its operations in the same way it has done for three years and the viability of the Stargate Worlds project is not in question. We fully expect to complete and ship Stargate Worlds in 2009."

This year, Activision and Blizzard merged under French media group Vivendi (Blizzard's parent company) to become the biggest, baddest game publisher in the known universe. To make sure investors know just how awesome that event was, Vivendi sent out a press release describing its generally excellent financial condition.

Earnings for Vivendi as a whole were reported to be up 10.2% for the first six months of this year. While game division earnings are still actually down compared to this time last year, that should be no cause for alarm. It can be attributed to the lack of a World of Warcraft expansion. By this time last year, The Burning Crusade had reached store shelves.

Vivendi assured investors that it still plans to release Wrath of the Lich King by the end of this year, so that bump is still coming. But will Wrath be as big as The Burning Crusade? By definition it can't be any bigger, because you have to have played the TBC content to reach the point where you can enjoy most of what Wrath has to offer, right? Apparently we'll see soon.

---

	One of Azeroth's millions of citizens? Check out our ongoing coverage of the World of Warcraft, and be sure to touch base with our sister site WoW Insider for all your Lich King needs!

Newsmagazine The Economist ran an article titled "Playing for profit" about using video game technology to increase productivity in the workplace. The article -- which was a sort of book report on "Changing the Game: How Video Games Are Transforming the Future of Business" by David Edery and Ethan Mollick -- looked to trends such as game mods and web-based-games-as-marketing-tools for inspiration, but special emphasis was placed on MMOs, including World of Warcaft and EVE Online.

Believe it or not, the WoW feature that was heralded by the writer was the soul-crushing grind! Or rather, the grind was compared to the sorts of tasks that your average office worker has to sit through each day. WoW provides a context -- the leveling system and other rewards -- that (supposedly) makes the grind worth the trouble. Companies should emulate that, the article says.

EVE, on the other hand, was used to demonstrate what not to do. That's pretty ironic, since The Economist's editorial stance is all about economic and societal openness! Regardless, the author pointed to the famous incident in which a CCP employee provided inside help to a corporation at war, using it as an example of the dangers of game-playing in a business environment.

Action-oriented MMORPG The Chronicles of Spellborn has found a publisher in Acclaim Games, the MMO-focused reincarnation of now-defunct Acclaim Entertainment. The company was founded by former Activision CEO Howard Marks, who bought the brand name from the original Acclaim after it crashed and burned in 2004.

David Perry -- Chief Creative Officer of Acclaim Games -- published a letter to the Spellborn community announcing the deal. In it, he talks up the game and the dev team behind it, saying that they immediately stood out to him and the other folks at Acclaim. We'll assume that Acclaim was the company that wrote the letter of intent way back in April, but who can say for sure?

Spellborn had already landed a publishing deal for Europe and Asia with Frogster Interactive. Last we heard the game was due out by the end of 2008, but we're not super-confident about it. Spellborn is still in its closed beta testing phase at the moment.

Hail to the King, long may EA reign. But what of the recently completed merger between Activision and Vivendi? In an analysis on the Next Generation site, there's discussion of a possible future where Activision-Blizzard name hangs above Electronic Arts on the big board of game publishers. The MMO-money powered company may be aiming for number one, but the site states EA might be ahead of the curve here. The current champ is going to have higher profit margins, and the company is going to be releasing a number of new game franchises over the next six months.

In another similarity between the two organizations, GamesIndustry.biz is reporting that the newly-minted megacorporation may be setting its sights on Take Two. Analysts at the Janco Partners firm believe that Activision-Blizzard will begin analysis of the scrappy GTA publisher in a move mirroring that of Electronic Arts. Though there are skeptics, that would certainly be a bold first move for the freshman corporation.

If you can't beat em', join em', appears to be the logic used by Activision in the recently confirmed merger. The website for industry rag Variety is reporting that before the idea of a copacetic merger of two gaming giants was pitched, Activision was interested in just buying Blizzard outright from the Vivendi folks. Bobby Kotick was very interested in Vivendi's crown jewel and the possible revenues from the sparkle inside: World of Warcraft.

The article notes how different that tone was than just a few years ago, when Vivendi tried to sell their games business off to pay down debt. At the time no-one was willing to bite, a state of affairs the company is probably now very grateful for. Ubisoft's CEO Yves Guillaume will apparently be one of the individuals quoted in an upcoming story on the site about the merger, and offered up this pithy insight about the deal.

Originally, Activision wanted to buy Blizzard. "'One game, World of Warcraft,' bought Activision."

Market research and consulting firm Strategy Analytics has forecasted a surge in virtual world registrations over roughly the next decade. The firm's study is titled 'Market Forecasts for Virtual World Experiences - from Habbo Hotel to Second Life and Beyond - 2008 to 2017.' It posits that roughly 22 percent of global broadband users will participate in one or more virtual worlds on some level. The end result will be a global virtual world market with one billion registrants. That throng of virtual world residents will provide an estimated eight billion USD in service opportunities for companies that learn how to do business effectively in these spaces.

Strategy Analytics has been keeping a close eye on virtual worlds of late. The firm released another report on the growing market in May, as well as a presentation seemingly geared towards fledgling companies wishing to capitalize on what might seem to them an abstract, if not bizarre, new market. Adrian Bowles, Executive Director of Virtual World Strategies at Strategy Analytics, writes, "For this generation it is as natural to interact with a friend represented by a flying cat as it is for real world senior citizens to gather in a town center and reminisce," for his 'Finding Business Value in Virtual Worlds' presentation. The Strategy Analytics next-decade projections are specifically for non-gaming virtual worlds. Were they to include the massively multiplayer online market, the global figures would likely be drastically higher.

Nic Mitham from K Zero is going to offer up the key things he's learned about virtual worlds in the last 18 months. But who is Nic Mitham, you wonder, and what is K Zero? Mitham describes himself as a "one time corporate strategist, ad man and analyst. Now spreading the metaverse word." K Zero describes itself as a virtual worlds consultancy, 'specialists in connecting real world brands and companies with the residents and environments of virtual worlds.'

Mitham's most recent blog post, '50 lessons I've learned in virtual worlds' is an introduction to his upcoming series of reflections on the unpredictable nature of the metaverse. The series of posts will be a look back at what Mitham's seen in the 18 months he's been immersed in the virtual. It's chiefly aimed at those interested in doing business in virtual worlds. Mitham writes,"The point to getting my 50 lessons 'out there' is to attempt to ensure mistakes made by companies along the way are not repeated by others and also to hopefully assist new companies in this space get traction as quickly as possible, because that's in the interest of everyone."

That's not to say that only biz types will get something from his blog; the series of insights is likely to have some significance to the people who populate the virtual worlds already in existence, and those who will flock to the birth of new worlds in the future.

The conventional wisdom in any service-driven industry is that it's far, far cheaper to retain an existing customer than to recruit a new one. This is especially true in the MMOG industry, where your business model is largely dependent on maintaining a long-term subscriber base. The concept also applies to transaction-driven and episodic games, where you need your customers to want to stick around and continue spending money. Box sales are great, but ultimately they're pretty useless except as an indicator of how many people actually bought the game -- returning players are the bread and butter of the MMO world.

In fact, that's exactly why companies are so interested in finding out why you're quitting their game. If they can fix issues that are making a lot of people quit, they can retain more customers and drive up their revenue. Surprisingly, Blizzard is the only company I know of which actually makes people fill out an exit survey in order to cancel a subscription. It's not that annoying and it gives them great information about how to make their game better for you (so if you're adamant on copying Blizzard, that's a good thing to copy). Unfortunately, Blizzard keeps notoriously quiet about their internal numbers like that. So why exactly do people quit MMOGs, and what can and should game companies be doing to keep you interested?

Is it just us or are people settling into their habits lately? Age of Conan is a standby for a lot of folks since release, while WoW remains a constant favorite among MMO players. EVE may have seen a little boost in the ratings lately thanks to all the buzz around the expansion (ditto for DDO), but there hasn't really big a big shakeup in the MMO game in quite a while, seems like. Nevertheless, it's Friday, so it's time to ask you, dear reader: What aRe yoU Playing?

Massively's own James Egan is one of those diving back into EVE Online, presumably to blast some nubs out of the sky. I continue to be fascinated by World of Warcraft -- my Hunter is continuing the climb to 70, even if it's slow going lately. And Tateru Nino still hangs out in Second Life and City of Heroes.

So things are pretty business as usual this weekend -- would it be wrong to start asking for an MMO release that actually shakes things up? Have you recently broken ground on a new and exciting MMO, or are you standing by your old standbys this weekend? What are you up to?

It's been tough times recently for NCsoft. Sales of their big-budget sci-fi MMO Tabula Rasa have been less than spectacular and their numbers for the first fiscal quarter of 2008 were disappointing, to say the least. In a recent report by GI.biz however, NCsoft CEO Geoff Heath expressed optimism about his company's prospects for the remainder of the year. Despite having no new titles in the cooker (Aion is still beyond the horizon at this point), Heath is of the belief that his company's portfolio is strong enough to simply grow their way back to profitability, saying, "This is a pretty robust business - if you get it right - you've only got to look at World of Warcraft."

Far be it from us to doubt the sincerity of Heath's statements, but that's a heavier dose of optimism than we're accustomed to seeing from an executive. To be sure, NCsoft's portfolio of games is probably the most robust that exists within a single company, and if Lineage II continues growing as strongly in Korea as it as has been, his comments may very well come to fruition. One simply wonders if their aging stable of games is going to continue to see growth in a marketplace that grows more crowded by the day. To be put it nicely, we're less confident than Heath.

Gamasutra's weekly analysis of top game sales offers a great temperature reading on the hottest new gaming properties. It's interesting to note, then, that MMOs are in the top five across all three major gaming markets in the PC category. Age of Conan, of course, is a major contributor to this distinction. The regular box for Conan takes the top spot in American PC sales, while the elusive Collector's edition clocks in an #3.

Over in Europe, MMOs dominate the chart. Conan is in the top spot, while World of Warcraft grabs #2 and the Burning Crusade expansion has a lock on slot #3. Though Age of Conan doesn't appear on Japan's top five chart, the newest Final Fantasy XI collection does. Spot number 3 in the Asian country goes to the venerable massive game. These numbers come from Amazon.com, so take that bias into account when judging these results. Still, the EU sales are particularly interesting; perhaps a spike in WoW sales prompted by the recent Lich King news drop?

Our recent in-depth look at the flood of information concerning World of Warcraft's Wrath of the Lich King expansion gave us some cause for speculation. Specifically, the news about the multiple-rider mounts has given us an intriguing idea for a new way to make money in-game.

There are two levels to this idea, and they both revolve around players who don't have access to high-speed mounts of their own. One briefly wonders why this change in transportation was implemented, but only briefly. Once the possibilities become clear, there will undoubtedly arise new uses for the piggyback functionality that are still somewhat nebulous at this stage. With no further ado, our ideas after the jump.

A study released by Gartner, a large research firm based in Connecticut, claims that 90% of all "business forays into virtual worlds" fail within 18 months.

According to the study, most businesses focus too much on expensive and unnecessary technology such as powerful physics engines, and don't pay enough attention to the demands and interests of users actual or potential. This is not surprising to us; savvy MMO developers will talk your ear off about how multi-million dollar graphics are at best a red herring and at worst a harbinger of doom.

On the other hand, the study also said that by 2012, 70% of all organizations will be using virtual worlds, and that those endeavors will more successful because businesses will have learned exactly what to expect and will plan development accordingly.

[Via Worlds in Motion]

We all know that MMOs don't come cheap. While we still chuckle a bit at the suggestion that it takes an investment of over $1 billion to make a truly blockbuster MMO, it does cost quite a bit to keep a team of highly skills programmers and artists housed and clothed for the daunting 2 year+ development cycle that they're subject to these days.

So when Funcom announced an earnings loss of $3.13 million during the first quarter of this year ending March 31, we can't say we were terribly surprised. They continue to subsist on revenues from Anarchy Online, which they've described as steady, while they gear up for the Age of Conan launch. While AoC is still less than a sure thing, they're confident that they'll have a strong launch, based on the million plus beta applications they've received and generally positive reports they've been getting from the experts.